Cheung Kong Infrastructure, headed by Hong Kong billionaire Li Ka-shing, has made an unsolicited bid to take over Sydney-based asset manager Duet Group, valuing the listed pipeline and electricity network operator at A$7.3 billion ($5.45 billion; €5 billion).
Duet confirmed receipt of the A$3 a share all-cash proposal – which values the firm at a 28 percent premium to last Friday's trading price – and said it was “indicative, incomplete, non-binding and conditional”. The takeover proposal would be subject to regulatory approvals, including from the Foreign Investment Review Board.
The Australian company said it was currently evaluating the bid and recommended its shareholders – including UniSuper, Vanguard, Blackstone and Lazard – to “take no action” as there was no certainty the proposal would proceed further.
CKI did not respond to queries by press time.
Duet's assets include the Dampier Bunbury Pipeline, which is a key gas transmission pipeline in Western Australia, and United Energy, an electricity distributor covering regions near Melbourne. It also owns a Brisbane-based clean energy power operator with assets at home and in Europe and the US.
This is the second attempt made by the Hong Kong-listed infrastructure investment vehicle this year to acquire Australian infrastructure assets.
CKI's attempt to acquire a controlling stake in Ausgrid, the country's largest electricity distribution company, as well as a rival bid from China's State Grid failed, as both were rejected in August by the Australian government, citing national security concerns. The asset was later acquired by an 'all-Australian' consortium formed by IFM Investors and AustralianSuper for A$16.2 billion.
The Hong Kong-listed company already has a presence in the Australian market with a sizable portfolio of energy assets. It has been active in Australia since 1999, investing mainly in electricity distribution assets. With assets such as Power Networks, in south Australia, Victoria's Powercor Australia and CitiPower, it fully acquired the natural gas distributor Envestra, which is now known as Australian Gas Networks, in 2004 for A$2.37 billion.
In addition to the Australian portfolio, the HK$170 billion ($22 billion; €20 billion) company also owns assets in Hong Kong, China, the UK, continental Europe, New Zealand and Canada.